Earlier this week, Sameet Sinha, Sr. Equity Research Analyst at B. Riley & Co., published a research report on the new gTLD business and Rightside. The report, which is available to B. Riley clients and subscribers, made some projections about the new gTLD domain names and the impact they will have across the board in the domain industry (from registries to registrars to service providers…etc). In addition, Mr. Sinha initiated coverage on Rightside (ticker: NAME) with a Buy rating and $15 price target.
Mr. Sinha’s report offered an extensive overview of the domain name space, as well as a history of the new gTLD program. It was quite comprehensive, and I think it will give readers a greater knowledge about the technical aspect of domain ownership and operations. If someone were to ask me for a resource to explain the gTLD program, I think this report would give them all of the information they need to learn about its genesis and future.
I thought Mr. Sinha’s report was quite interesting, especially because it comes from someone outside of the domain investment space. With Mr. Sinha’s permission, I want to share some excerpts from the report as well as a few projections that were made:
- “With the onset of the gTLD program, we believe we are in the beginning stages of democratization of the web, which would allow more power to domain buyers and sellers.“
- “Since then we have seen a level of inflation that indicates a value of about $2MM per gtLD“
- “We believe the importance of search engines could increase significantly with new gTLDs as consumer confusion about the extension of the business they want to find will lead to higher usage of search engines, in our opinion. “
- “Early adoption of TLDs have been strong “
- “We estimate new gTLDs will be 15%+ of domain industry by 2016 “
- “We officially estimate that gTLDs will generate about $930MM in bookings in the 2014-2016 period, reaching $500MM in 2016, from virtually zero in 2014.”
I won’t directly comment about Mr. Sinha’s projections, but to me, it appears fairly aggressive, especially considering where we are at to date. Last week, I read a report from Centralnic, and the company chairman said “To date, demand levels have fallen short of industry expectations, however CentralNic has performed strongly relative to the market with the new TLDs it has launched to date and is well positioned to take advantage of the growth in demand when it comes through.”
On a separate but related note, I think it is great to see an analyst from a firm like B. Riley & Co. covering the domain name space. The more coverage of this business, the better for those of us who make a living in the industry. Whether there are 20 million new gTLD domain names by 2016 or not, it’s nice to see coverage of the domain name space at this granular level.
If you would like to have access to the report, you should contact B. Riley & Co to get access to it.
Thank you to Frank for sharing this report with me.